Optimum order quantity

What is the optimal order quantity?

Die optimal order quantity Is a central term in Supply chain management. It describes the quantity of goods that a company should order in order to Minimize overall costs And at the same time the Efficiency in inventory management to maximize.

This is the point at which the Total of order costs and storage costs is the smallest. This concept is often used as part of Warehousing used to work economically and in a resource-saving manner.

Which factors influence the optimal order quantity?

The optimal order quantity is determined by several parameters, including:

• demand according to the respective product
• Delivery times of the supplier
• Storage costs for stockpiling
• Order costs per order

A precise identification of these factors helps to reduce storage and procurement costs and to make the entire supply chain more efficient.

The Andler formula for calculating the optimal order quantity

To calculate the optimal order quantity, the Andler formula (also Wilson formula or Economic Order Quantity — EOQ) is used. The formula is:

Root of (annual requirement x order cost x 2)/(product value x inventory cost rate)

This calculation is particularly useful for companies with constant demand and stable cost structures.

Limits of the classic calculation of the order quantity

The Andler formula provides a solid basis, but does not take into account all practice-relevant influencing factors:

• Fluctuating demand is not included
• Varying storage or ordering costs remain disregarded
• Delivery times or their fluctuations are not shown
• Volume discounts or price scales are missing in the calculation

Therefore, there is an increasing number of modern, dynamic processes resorted to.

Using artificial intelligence to optimize order quantities

Artificial intelligence (AI) enables a much more precise calculation of the optimal order quantity, as it:

• historical sales data,
• current stocks,
• Delivery times,
• as well as external influencing factors such as weather, weekdays, or holidays

considered. AI recognizes patterns, creates demand-based forecasts and derives from them automated order suggestions off.

The result:

• Fewer overstocks and shortages
• Lower storage and ordering costs
• Higher planning and supply security

Objective of the optimal order quantity

The main goal is to Total costs of procurement and warehousing to minimize. At the same time, a balance should be found between sufficient availability of goods and economic warehousing.

This contributes to:

• to avoid material bottlenecks
• Making optimal use of storage capacities
• to make operational processes more efficient

Benefits of the optimal order quantity process

Using the optimal order quantity offers numerous advantages:

• Reduction of overall costs in warehousing and procurement
• Improved inventory planning through well-founded bases for decision-making
• More efficient processes in purchasing and warehouse management
• Strengthen overall supply chain performance

Importance of the optimal order quantity for the food industry

In Food trade and catering Is the precise determination of the optimal order quantity particularly relevant — especially because of short shelf life many products.

• One too low order quantity leads to bottlenecks and Losses in sales
• One too high order quantity induced superfluous storage costs and food waste

Through needs-based planning and precise forecasts, you can Lowered costs, Sustainability promoted And the Product availability be improved.

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